Tenenbaum - First Cir. Appeal - Brief of US

Case: 10-1947 Document: 00116129389 Page: 1 Date Filed: 10/29/2010 Entry ID: 5499367
Nos. 10-1883, 10-1947 & 10-2052

_________________________________________________________________
IN THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
SONY BMG MUSIC ENTERTAINMENT, a Delaware General Partnership;

WARNER BROS. RECORDS, INC.,a Delaware Corporation; ATLANTIC
RECORDING CORPORATION, a Delaware Corporation; ARISTA RECORDS,
LLC, a Delaware Limited Liability Company; UMG RECORDINGS, INC., a
Delaware Corporation; UNITED STATES,
Plaintiffs-Appellants/Cross-Appellees,
v.
JOEL TENENBAUM,
Defendant-Appellee/Cross-Appellant.
__________________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS
BRIEF FOR THE UNITES STATES AS

PLAINTIFF-APPELLANT/CROSS-APPELLEE
_____________________________
TONY WEST
Assistant Attorney General
CARMEN ORTIZ
United States Attorney
SCOTT R. McINTOSH
(202) 514-4052
JEFFREY CLAIR
(202) 514-4028
Attorneys, Civil Division
Room 7243, Department of Justice
950 Pennsylvania Ave., N.W.
Washington, D.C. 20530
_________________________________________________________________
TABLE OF CONTENTS
Page
STATEMENT OF JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
STATEMENT OF THE ISSUES PRESENTED FOR REVIEW. . . . . . . . . . . . . . . 2
STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. Statute Involved.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. District Court Proceedings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. District Court Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
I. The District Court Should Not Have Reached The

Constitutionality of The Jury’s Statutory Damage Award
Without First Exercising Its Common Law Power Of
Remittitur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
II. Due Process Review of Statutory Damage Awards Under

The Copyright Act Must Proceed Under Williams, Not Gore . . . . . 30
III. The District Court Misconstrued The Scope And Purpose

Of Statutory Damages Under The Copyright Act.. . . . . . . . . . . . . . . 40
A. Congress Intended The Full Range of Statutory

Damages To Apply To The Unauthorized Copying
and Distribution Of Sound Recordings Over A
Peer-to-Peer Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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B. The Court Improperly Discounted The Potential

Harm Caused By Defendant’s Distribution of
Copyrighted Works To Other Network Participants. . . . . . . 49
CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
FRAP 32(a)(7) CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
ADDENDUM
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TABLE OF AUTHORITIES
Cases: Page
Abner v. Kansas City Southern R. Co., 513 F.3d 155 (5th Cir. 2008).. . . . . . . . 38
Accounting Outsourcing LLC v. Verizon Wireless Personal

Communications, LP, 329 F. Supp. 2d 789 (M.D. La. 2004). . . . . . . . . . . . . . 39
Anderson v. Atlantic Recording Corp., 2008 WL. 2316551

(S.D. Tex. March 12, 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Arista Records, LLC v. Launch Media, Inc., 578 F.3d 148 (2d Cir. 2009). . . . . 54
Ashwander v. TVA, 297 U.S. 288 (1936). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104 (1991).. . . . . . . . . . 22
Blunt v. Little, Fed. Cas. No. 1,578, 3 Mason 102 (1822). . . . . . . . . . . . . . . . . 22
BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). . . . . . . . . . . . passim
Brady v. Daly, 175 U.S. 148 (1899).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Brisbal-Ramos v. City of Mayaguez, 467 F.3d 16 (1st Cir. 2006).. . . . . . . . . . . 27
Browning-Ferris Industries v. Kelco Disposal, Inc., 492 U.S. 257 (1989).. . . . 32
Capitol Records, Inc. v. Thomas-Rasset, 680 F. Supp. 2d 1045

(D. Minn. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 23, 24
Centerline Equip. Corp. v. Banner Personal Serv., Inc.,

545 F. Supp. 2d 768 (N.D. Ill. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Continental Resources, Inc. v. OXY USA, Inc., 101 F.3d 634

(10th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Cooper Ind. Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001). . . 28, 29
Cortez v. Trans Union, LLC, Nos. 08-2465, 08-2466,

2010 WL. 3190882 (3d Cir. Aug. 13, 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-iii-
Dimick v. Schiedt, 293 U.S. 474 (1935). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
EEOC v. Fed. Express, 513 F.3d 360 (4th Cir. 2008) . . . . . . . . . . . . . . . . . . 38
F. W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 222 (1952). . 6, 50, 51
Feltner v. Columbia Pictures Television, Inc., 523 U.S.C. 340 (1998).. . . passim
Fitzgerald Publ'g Co. v. Baylor Publ'g Co., 807 F.2d 1110 (2d Cir. 1986).. . . . . 7
Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996).. . . . . . . . . . . . . 10
Hetzel v. Prince William County, 523 U.S. 208 (1998). . . . . . . . . . . . . . . . . . . . 26
Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415 (1994). . . . . . . . . . . . . . . . . . . . 22
Jimenez v. Quarterman, 129 S. Ct. 681 (2009).. . . . . . . . . . . . . . . . . . . . . . . . . . 45
Johanson v. Combustion Eng., Inc., 170 F.3d 12320 (11th Cir. 1999). . . . . . . . 27
L.A. Westermann Co. v. Dispatch Printing Co., 249 U.S. 100 (1914). . . . . . . 6, 51
Lee v. Edwards, 101 F.3d 805 (2d Cir. 1996).. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Leiber v. Bertelsman AG, No. 00-1369, 2005 WL. 1287611

(N.D. Cal. June 1, 2005).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Lowrys Reports, Inc. v. Legg Mason, Inc., 302 F. Supp. 2d 455

(D. Md. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 37
Lyng v. Northwest Indian Cemetery Protective Ass’n, 485 U.S. 439

(1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Metro-Goldwyn-Mayer Studies Inc. v. Grokster, Ltd, 545 U.S. 913 (2005). . 7, 52
Negron v. Caleb Brett U.S.A., Inc., 212 F.3d 666 (1st Cir. 2000). . . . . . . . . . . . 19
Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991). . . . . . . . . . . . . . . . . . . . 23
Paramount Pictures Corp. v. Davis, 234 F.R.D. 102 (E.D. Pa. 2005). . . . . . . . . . 7
-iv-
Parker v. Time Warner Entertainment Co., 331 F.3d 13 (2d Cir. 2003). . . . . . . 38
Pennsylvania Department of Corrections v. Yeskey, 524 U.S. 206 (1998). . . . . 45
Romano v. U-Haul International, 233 F.3d 655 (1st Cir. 2000). . . . . . . . . . 37, 38
Ross v. Kansas City Power & Light Co., 293 F.3d 1041 (8th Cir. 2002).. . . . . . 27
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985). . . . . . . . . . . . . . . . . . . . . . 45
Segal v. Gilbert Color System Inc., 746 F.2d 78 (1st Cir. 1984). . . . . . . . . . 15, 21
Segrets, Inc. v. Gillman Knitwear Co., Inc., 207 F.3d 56 (1st Cir. 2000). . . . . . . 6
Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984).. . . . . . . . . . . . . 45, 52
Southern Union Co. v. Irvin, 563 F.3d 788 (9th Cir. 2009). . . . . . . . . . . . . . . . . 27
Spector Motor Serv. v. McLaughlin, 323 U.S. 101 (1944). . . . . . . . . . . . . . . . . . 20
St. Louis, I. M. & S. Railway Co. v. Williams, 251 U.S. 63 (1919). . . . . . . passim
Texas v. America Blastfax, Inc., 121 F. Supp. 2d 1085 (W.D. Tex. 2000). . . . . 39
United States v. Batchelder, 442 U.S. 114 (1979). . . . . . . . . . . . . . . . . . . . . 33, 34
United States v. Fazal-Ur-Raheman-Fazal, 355 F.3d 40 (1st Cir. 2004). . . . . . 19
Vengas-Hernandez v. Sonolux Records, 370 F.3d 183 (1st Cir. 2004). . . . . . . . . 6
Verizon California Inc. v. Onlinenic, Inc., No. 08-2832, 2009

WL. 2706393 (N.D. Ca. Aug. 25, 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Zomba Enterprises, Inc. v. Panorama Records, Inc., 491 F.3d 574

(6th Cir. 2007), cert. denied, 128 S. Ct. 2429 (2008). . . . . . . . . . . . . . 36, 39, 40
Constitution:
Due Process Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
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Seventh Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 22, 26, 27, 28, 29

Eight Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Excessive Fines Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Statutes:
Digital Theft Deterrence and Copyright Damages Improvement Act of 1999,

P. L. No. 106-160, § 2, 113 Stat. 1774 (1999) .. . . . . . . . . . . . . . . . . . . . . 22, 46
1 Stat. 124-26 (1790).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Copyright Act:
17 U.S.C. 101, et seq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

17 U.S.C. 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
17 U.S.C. §§ 101, 102(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
17 U.S.C. 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
17 U.S.C. §§ 106(3), 115(d).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
17 U.S.C. §§ 106(4), 106(6) & 114(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
17 U.S.C. 501(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
17 U.S.C. 501(b).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
17 U.S.C. 502 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
17 U.S.C. 503 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
17 U.S.C. 504. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
17 U.S.C. 504(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
17 U.S.C. 504(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
17 U.S.C. 504(c)(2) (i) & (ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
28 U.S.C. 517.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
28 U.S.C. 1291 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
28 U.S.C. 1338(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
28 U.S.C. 2403(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
42 U.S.C. 1981a(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-vi-
Rules:
Fed. R. Civ. P. 59(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 20, 22, 29
Legislative Materials:
H.R. Rep. No. 105-339, 105th Cong., 1st (1997). . . . . . . . . . . . . . . . . . . . . . 46-47

H.R. Rep. No. 106-216, 106th Cong., 1st Sess. 7 (1999). . . . . . . . . . . . . . . . 18, 46
H.R. Rep. No. 106-216, 106th Cong., 1st Sess. 3 (1999). . . . . . . . . . . . . . . . . . . 47
Privacy and Piracy: The Paradox of Illegal File Sharing on Peer-to-Peer

Networks and the Impact of Technology on the Entertainment Industry:
Hearing Before the Permanent Subcomm. on Investigations of the Sen.
Comm. on Governmental Affairs, 108th Cong., 1st Sess. 10 (2003) . . . . . . . . . . 44
Report of the Register of Copyrights on the General Revision of the U.S.

Copyright Law, 87th Cong., 1st Sess. 102-03 (House Judiciary Comm.
Print 1961). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 50
Miscellaneous:
11 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure

§ 2815 (2d ed. WESTLAW 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright pp. 14-68. . . . . 7
Rob and Waldfogel, Piracy on the High C’s: Music Downloading, Sales
Displacement, and Social Welfare in a Sample of College Students,
49 Journal of Law and Economics 29 (April 2006).. . . . . . . . . . . . . . . . . . . 52
-vii-
IN THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
Nos. 10-1883, 10-1947 & 10-2052
SONY BMG MUSIC ENTERTAINMENT, a Delaware General Partnership;

WARNER BROS. RECORDS, INC.,a Delaware Corporation; ATLANTIC
RECORDING CORPORATION, a Delaware Corporation; ARISTA RECORDS,
LLC, a Delaware Limited Liability Company; UMG RECORDINGS, INC., a
Delaware Corporation; UNITED STATES,
Plaintiffs-Appellants/Cross-Appellees,
v.
JOEL TENENBAUM,
Defendant-Appellee/Cross-Appellant.
__________________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS
BRIEF FOR THE UNITES STATES AS

PLAINTIFF-APPELLANT/CROSS-APPELLEE
_____________________________
STATEMENT OF JURISDICTION
1. This is an action for copyright infringement under the Copyright Act, 17
U.S.C. 101, et seq. The district court had subject matter jurisdiction pursuant to
28 U.S.C. 1338(a).
2. The district court entered final judgment disposing of all the parties’
claims on July 9, 2010. Clerk’s Notation of Record (“NR.”) 48. The private
plaintiffs filed a timely notice of appeal on July 21, 2010. NR. 49. Defendant
filed a timely cross-appeal on July 30, 2010. NR. 50. The United States, plaintiff-
intervenor below, filed a timely notice of appeal on September 3, 2010. NR. 60.
The three appeals have been consolidated. This Court has appellate jurisdiction
pursuant to 28 U.S.C. 1291.
STATEMENT OF THE ISSUES PRESENTED FOR REVIEW
1. Whether the district court, in reviewing whether a jury award of statutory
damages under the Copyright Act was excessive, violated the doctrine of
constitutional avoidance by basing its holding on the Due Process Clause, without
first exhausting its common law powers of remittitur.
2. Whether, assuming constitutional review is appropriate, the district court
applied incorrect legal standards in determining whether the jury’s award of
statutory damages is consistent with due process.
STATEMENT OF THE CASE
Plaintiffs allege that the defendant violated their copyright in 30 sound
recordings by using an Internet-based, peer-to-peer network to download
unauthorized copies of the recordings and to distribute them to others. They filed
an action for copyright infringement against the defendant in federal district court,
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demanding injunctive relief restraining further acts of infringement as well as
statutory damages under 17 U.S.C. 504(c) of the Copyright Act.
Defendant Tenenbaum moved to dismiss the complaint, asserting that the
Copyright Act is unconstitutional. The United States intervened in the action to
defend the constitutionality of the statute. See 28 U.S.C. §§ 517, 2403(a). The
district court denied Tenenbaum’s motion to dismiss, without prejudice to his right
to file a post-trial motion challenging the constitutionality of the jury’s damage
award. See Order of June 15, 2009, NR. 847.
After trial, the district court concluded that defendant had admitted
engaging in conduct that clearly constituted copyright infringement. The court
therefore directed judgment on the issue of liability and submitted the case to the
jury for a determination of appropriate statutory damages. The jury returned a
verdict awarding plaintiffs $675,000 in statutory damages.
Tenenbaum then filed a motion for new trial or remittitur, arguing that the
award was so grossly excessive as to violate due process. The court granted
Tenenbaum’s motion in part, holding that the jury’s award was unconstitutionally
excessive and directing that the judgment be reduced to $2,250 per infringed
work, for a total of $67,500. These appeals followed.
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STATEMENT OF FACTS
1. Statute Involved.
The Copyright Act of 1976 confers upon the owner of a copyrighted
musical work various exclusive rights, including the rights to reproduce,
distribute, and perform the work. 17 U.S.C. 106. For copyright purposes, a
“musical work” consists of the notes and lyrics of a song, as distinct from any
single performance of that work. When a musical work is performed by a
particular artist and the ensuing “series of musical, spoken, or other sounds” is
fixed in a recording medium, the resulting work is a “sound recording.” 17 U.S.C.
101. The Act affords the owner of a copyright in a sound recording the exclusive
right to reproduce the sound recording, to prepare derivative works, and to
distribute the sound recording to the public. 17 U.S.C. §§ 101, 102(7), 106.
The transfer of a digital sound recording over the Internet and the resulting
creation of a copy on a local computer hard drive amount to the “distribution” and
“reproduction” of the work. See 17 U.S.C. § § 106(3), 115(d). Thus, one who,
without the copyright owner’s permission, downloads a sound recording over the
Internet or subsequently uploads the sound recording to other Internet users has
infringed the work. 17 U.S.C. 501(a). The copyright owner has a statutory cause
of action against the infringer (17 U.S.C. 501(b)) and may seek an injunction
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barring further acts of infringement (17 U.S.C. 502), the impoundment and
destruction of infringing copies and articles used in their reproduction (17 U.S.C.
503), and damages (17 U.S.C. 504).
This case concerns the application and constitutionality of the Copyright
Act’s damages provision, 17 U.S.C. 504. In brief, section 504 provides that an
infringer is liable for either: (1) the copyright owner’s actual damages and any
additional profits of the infringer, or (2) “statutory damages,” as defined under
section 504(c) of the Act.1 Statutory damages are available at the election of the
copyright owner, without proof of actual damages or lost profits. 17 U.S.C.
504(c). Such provisions for an award of “statutory damages” have been included
in federal copyright law since the first copyright act of 1790. See 1 Stat. 124-26
(1790). As the Register of Copyright has explained, the value of a copyright is
inherently difficult to determine and the loss caused, or profits derived, by an
infringer may be difficult or prohibitively expensive to prove. Register of
Copyrights, Report of the Register of Copyrights on the General Revision of the
U.S. Copyright Law, 87th Cong., 1st Sess. 102-03 (House Judiciary Comm. Print
1961). Limiting the copyright owner to such actual damages as can be proved in
court might therefore leave him without an adequate remedy. Accordingly, to
1
The full text of 17 U.S.C. 504(c) is reprinted in the addendum to this brief.
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ensure that copyright owners have meaningful redress, and to deter infringement,
federal copyright law has long authorized an award of “statutory damages” in lieu
of actual damages, with such damages to be determined, within broad statutory
limits, at the discretion of the trier of fact. See generally F. W. Woolworth Co. v.
Contemporary Arts, Inc., 344 U.S. 222, 231-33 (1952); L.A. Westermann Co. v.
Dispatch Printing Co., 249 U.S. 100, 106-07 (1914); Brady v. Daly, 175 U.S.
148, 154 (1899).
If statutory damages are elected, the statute provides that the court may
award such damages as it “considers just,” provided that the damage award falls
within the range specified by statute.2 17 U.S.C. 504(c)(1). Statutory damage
awards may generally range between a minimum of $750 and a maximum of
$30,000 per infringed work. Ibid; Vengas-Hernandez v. Sonolux Records, 370
F.3d 183, 192-94 (1st Cir. 2004). The statutory range of permissible damage
awards, however, may be increased or reduced in light of the infringer’s conduct.
2
Though the statute refers to an award of damages by “the court,” the
Supreme Court has held that there is a Seventh Amendment right to a jury trial on
all issues pertinent to the award of statutory damages, including the determination
of the amount of damages itself. Feltner v. Columbia Pictures Television, Inc.,
523 U.S.C. 340 (1998). Consequently, after Feltner, determinations of the
amount of statutory damages to be awarded under the Copyright Act must be made
by the jury if a jury trial has been demanded. See, e.g., Segrets, Inc. v. Gillman
Knitwear Co., Inc., 207 F.3d 56, 62-63 (1st Cir. 2000).
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Thus, if the infringement is willful, the statutory maximum is increased to
$150,000 per infringed work. Ibid. Conversely, if the defendant establishes that
he was not aware and had no reason to believe that his actions constituted an
infringement, the statutory minimum is reduced to $200 per infringed work. Ibid.
The courts have identified a number of factors bearing upon the appropriate award
within this statutory range. These include, but are not limited to, the expenses
saved and profits reaped by the infringer, the revenues lost by the plaintiff, the
value of the copyright, and the deterrent effect on other potential infringers. See
Fitzgerald Publ’g Co. v. Baylor Publ’g Co., 807 F.2d 1110, 1116-17 (2d Cir.
1986); see generally 4 Melville B. Nimmer & David Nimmer, Nimmer on
Copyright pp. 14-68 to 14-70 (2010).
2. District Court Proceedings.
Plaintiffs are a group of the country’s largest recording companies. They
allege that the defendant, Joel Tenenbaum, violated the Copyright Act’s
reproduction and distribution rights by using peer-to-peer, file-sharing software to
download and distribute 30 copyrighted sound recordings.3 They demanded
3
Peer-to-peer networking software enables participating computer users to
communicate and exchange files with each other, without mediation by a central
computer server. See Metro-Goldwyn-Mayer Studies Inc. v. Grokster, Ltd, 545
U.S. 913, 921-22 (2005); Paramount Pictures Corp. v. Davis, 234 F.R.D. 102,
104-06 (E.D. Pa. 2005).
-7-
injunctive relief restraining further infringement and directing the destruction of
all infringing copies, as well as statutory damages under 17 U.S.C. 504(c).
Tenenbaum moved to dismiss the complaint, asserting that the Copyright
Act is unconstitutional. He alleged that the statute violates the separation of
powers by placing the prosecution of an essentially criminal statute in private
hands, that section 504(c) – the statutory damages provision – violates the
Excessive Fines Clause of the Eighth Amendment, and that section 504(c) violates
the Due Process Clause because it authorizes damages disproportionate to the
harm caused by infringement. The United States intervened in the action to
defend the constitutionality of the statute. The district court subsequently denied
Tenenbaum’s motion to dismiss, without prejudice to his right to file a post-trial
motion challenging the constitutionality of any damages award the jury might
return. See Order of June 15, 2009, NR. 847.
At trial, defendant admitted engaging in conduct that clearly constituted
infringement of the 30 works identified in the complaint. The court accordingly
directed judgment on the issue of liability. Slip op. at 2. Thus, the only questions
submitted to the jury were whether Tenenbaum’s infringements were willful, and
the appropriate amount of statutory damages. Ibid.
The court instructed the jury that it may award, as it considers just, no less
-8-
than $750 and no more than $30,000 per sound recording downloaded or
distributed without a license. App. 68. It further instructed the jury that, in
considering the appropriate amount of the award, it may consider: the nature of
the infringement, defendant’s purpose and intent, defendant’s profits or saved
expenses, plaintiffs’ lost revenue, the value of the copyright, the duration of the
infringement, the defendant’s continuation of infringement after notice or
knowledge of copyright claims, and the need to deter this defendant or other
potential infringers. Ibid. Finally, it instructed the jury that it may award up to
$150,000 per infringed work if it finds that the infringement was willful,
explaining that the infringement is willful if the defendant had knowledge that his
actions constituted copyright infringement or acted with reckless disregard for the
copyright holder’s rights. App. 68-69.
The jury found that Tenenbaum willfully infringed plaintiffs’s copyrights
and imposed damages of $22,500 for each of the 30 infringed works at issue,
yielding a total damages award of $675,000. Slip op. at 2. Tenenbaum then filed
a motion for new trial or remittitur, arguing that the award was so grossly
excessive as to violate due process, and that Congress did not intend to impose the
statutory damages regime on individual, peer-to-peer file sharers who do not profit
from their infringement.
-9-
3. District Court Decision.
The court granted Tenenbaum’s motion in part, holding that the jury’s
award was unconstitutionally excessive and directing that the judgment be reduced
to $2,250 per infringed work, for a total award of $67,500.
a. The court first declined to avoid ruling on the constitutionality of the jury
award by relying upon its discretionary, common law power to overturn an
excessive jury award. The Federal Rules of Civil Procedure authorize the trial
judge to grant a new trial “for any of the reasons for which new trials have
heretofore been granted in actions at law in the courts of the United States.” Fed.
R. Civ. P. 59(a). This includes the discretion to overturn an excessive damage
award and to order a new trial without qualification, or to offer the plaintiff a
choice between a new trial and acceptance of a “remittitur,” i.e., a reduced award
deemed more appropriate by the trial judge. Gasperini v. Center for Humanities,
Inc., 518 U.S. 415, 431 (1996); see generally 11 C. Wright, A. Miller & M. Kane,
Federal Practice and Procedure § 2815 (2d ed. WESTLAW 2010).
The district court, however, concluded that plaintiffs would be unlikely to
accept a reduced judgment, and that if a new trial were ordered, the court would
most likely be faced again with the question of “whether to limit the range within
which the jury could award damages in order to ensure that the jury’s award was
-10-
not constitutionally out-of-bounds.” Slip op. at 14. The court further reasoned
that, notwithstanding the Seventh Amendment, if it ruled on whether the verdict
was unconstitutionally excessive, it would have the authority to direct that the
judgment be reduced to a specified sum, without ordering a new trial. Slip op. at
13. It therefore determined to forgo review of whether the verdict was excessive
under the common law standards for remittitur and to rule instead on whether the
verdict comports with the Due Process Clause.
b. Turning to the due process inquiry, the court first held that the standards
set forth in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), for
evaluating whether a punitive damages award is excessive under the Due Process
Clause are relevant to whether an award of statutory damages under the Copyright
Act is unconstitutionally excessive. In Gore, the Supreme Court set forth three
“guideposts” for evaluating whether a jury’s award of punitive damages is so
“grossly excessive” as to violate the Due Process Clause: the degree of
reprehensibility of the defendant’s conduct, the ratio of the award to the actual
harm inflicted on the plaintiff, and the relation of the award to civil or criminal
penalties imposed by the legislature for similar misconduct. The government,
along with plaintiffs, argued that Gore is inapplicable here because it is tailored to
a review of punitive damages awarded at the jury’s otherwise unconstrained
-11-
discretion, not to review of a statutory award of damages within a range specified
by the legislature. The appropriate standard, we argued, is instead set forth in St.
Louis, I. M. & S. Railway Co. v. Williams, 251 U.S. 63 (1919), which holds that a
statutory damages award may not be set aside under the Due Process Clause unless
it is “so severe and oppressive as to be wholly disproportioned to the offense and
obviously unreasonable.” Id. at 67.
The court held that the Gore standards, while not controlling, are “relevant”
to the constitutionality of statutory damages awards under section 504(c) and
dismissed the differences between the Gore and Williams standards as minimal.
Slip op. at 26. It stated that “it is appropriate to apply the three [Gore] guideposts
to the jury’s award” but that in applying these guideposts it would “remain
cognizant of two factors that distinguish this case from a typical case in which
punitive damages are awarded: (1) the jury’s award fell within a range authorized
by Congress, and (2) the maximum and minimum amount of statutory damages
that could be imposed * * * was clearly set forth in section 504(c).” Slip op. at 29.
It concluded that “[w]hile the [Gore] guideposts are helpful aids, my ultimate task
is to determine whether the jury’s statutory damages award is ‘grossly excessive’
in relation to the government’s legitimate interests in prescribing such awards –
namely, compensating copyright owners and deterring infringement.” Ibid.
-12-
c. The court held that the jury’s award is unconstitutionally excessive
under these standards. First, the court, applying the third Gore guidepost,
concluded that the award is not commensurate with civil penalties authorized or
imposed in comparable cases. After surveying the legislative history, the court
reasoned that Congress did not anticipate that individuals who engaged in
assertedly noncommercial file sharing would be subject to liability for the full
range of statutory damages. Slip op. at 34-36. It further noted that the jury’s
award is far in excess of damages awarded in “public performance” cases, where
bars and other establishments that play copyrighted songs to enhance their
business were found to have willfully infringed copyrighted works for their own
financial gain. Slip op. at 40-42.
Second, the court held that the jury award is disproportionate to any harm
caused to plaintiffs or benefit derived by Tenenbaum. The court noted that the
jury award dwarfed any revenues plaintiffs might have obtained had Tenenbaum
purchased copies of the songs at issue. It also dismissed plaintiffs’ contention that
they were significantly damaged by Tenenbaum’s distribution of the works to
others over a peer-to-peer network, reasoning that “it seems likely that the
individuals who downloaded songs from Tenenbaum’s shared folder would simply
have found another free source for the songs had Tenenbaum never engaged in file
-13-
sharing.” It thus concluded that “[w]hile file-sharing may be very economically
damaging to the plaintiffs in the aggregate, Tenenbaum’s individual contribution
to this total harm was likely minimal.” Slip op. at 45.
Finally, the court held that despite clear evidence of Tenenbaum’s sustained,
knowing, and substantial infringement of plaintiffs’ copyrights, the jury’s award is
egregiously high. The court reasoned that “[i]t seems fair to say that file-sharing,
in general, is fairly low on the totem pole of reprehensible conduct.” Slip op. at
52. It concluded that an award of three times the statutory minimum – $2,250 per
infringed work – is the maximum award constitutionally permissible in this case.
Slip op. at 53. It found that the total award after this reduction – $67,500 – is
significant and harsh, and that it “adequately compensates the plaintiffs for the
relatively minor harm that Tenenbaum caused them, and even more importantly,
should serve as a strong deterrent against unlawful file-sharing.” Slip op. at 55.
SUMMARY OF THE ARGUMENT
1. The district court should not have reached out to decide the
constitutionality of the jury award without first exercising its common law powers
of remittitur. Firmly established principles of judicial restraint require the court to
avoid constitutional adjudication if the issues presented can be resolved on other
grounds. Here, the court’s authority to review the verdict for excessiveness under
-14-
common law standards for remittitur would have obviated the need to decide any
of the due process issues reached by the court. Common law remittitur affords the
reviewing court ample authority to set aside jury awards that are grossly
disproportionate to the plaintiff’s injury or that shock the judicial conscience.
Segal v. Gilbert Color Sys. Inc., 746 F.2d 78, 80-81 (1st Cir. 1984). Those
standards are commensurate with the requirements of due process and, if applied,
would have enabled the district court to exercise a meaningful check on the jury’s
discretion, without requiring the court to engage in needless constitutional
adjudication. See Capitol Records, Inc. v. Thomas-Rasset, 680 F. Supp. 2d 1045
(D. Minn. 2010) (employing common law remittitur to award of statutory
damages under the Copyright Act).
The court’s reasons for nonetheless eschewing remittitur and deciding the
case on constitutional grounds are unpersuasive. The court concluded that
common law remittitur procedures would not ultimately avoid the question of
whether the jury verdict is unconstitutionally excessive because plaintiffs would
not accept a reduced judgment, and because a new jury would likely return a
verdict of comparable magnitude. There is, however, no reason to assume that, if
the current jury verdict is excessive, a properly instructed, new jury would make
the same award. Moreover, the court’s determination to take the matter from the
-15-
jury and to enter judgment for a reduced amount itself raises a substantial
constitutional question as to whether such action violates the Seventh Amendment
right to a jury trial recognized in Feltner, supra.
All these constitutional issues could be avoided if the jury verdict is
reviewed under the long established standards for common law remittitur.
2. Assuming constitutional review is necessary, the district court applied
the wrong standards for determining whether a jury award is so excessive as to
violate the Due Process Clause. In Williams, the Supreme Court held that where
the legislature has specified a range of monetary penalties for the violation of a
statute, a judgment imposing a penalty falling within the statutory range comports
with due process unless it “is so severe and oppressive as to be wholly
disproportioned to the offense and obviously unreasonable.” Id., 251 U.S. at 66-
67. The Court stressed that the legislature must be accorded wide latitude in
fixing the appropriate penalties, and that the validity of the penalty must therefore
be evaluated with due regard for the legislature’s power to adjust the amount to the
public harms caused by the statutory violation. Ibid.
Contrary to the district court’s reasoning, Williams, not Gore, establishes
the applicable framework for determining whether an award of statutory damages
under the Copyright Act comports with due process. Gore imposes limitations on
-16-
a jury’s authority to award punitive damages in circumstances where the
legislature has not otherwise constrained the jury’s discretion. It thus requires that
the jury award not be grossly disproportionate to the plaintiff’s injury or
defendant’s misconduct. Absent such limitations, the Gore Court reasoned,
defendants could not have fair, constitutionally sufficient notice of the magnitude
of potential sanctions.
The Gore framework, however, does not apply to a statutory regime in
which Congress has specified in advance the range of appropriate damages. In
that circumstance, the statute itself supplies the constitutionally required notice
deemed missing in Gore. Moreover, unlike jury awards of punitive damages, an
award of statutory damages is based on legislative judgments that must be
accorded deference by the reviewing court. Williams, not Gore, sets forth the
appropriate standards for conducting such review. The district court erred in
failing to apply Williams below.
3. The district court’s review of the jury’s statutory award was further
tainted by several fundamental misconceptions about the purposes of a statutory
damages award and the interests protected by the Copyright Act.
First, the court erred in concluding that, because peer-to-peer networking is
a relatively recent development, Congress did not intend the full range of statutory
-17-
damages to apply to defendants who use such networks to commit copyright
infringement. The plain language of the statute draws no distinctions based upon
the means used to infringe a copyrighted work. Moreover, legislative history
clearly shows that when, in 1999, Congress amended the statute to increase the
maximum amount of statutory damages, it specifically intended to deter the use of
newly emerging, Internet-based technologies to facilitate copyright infringement.
See H.R. Rep. No. 106-216, 106th Cong., 1st Sess. 7 (1999).
Second, the court erred in discounting the harm to plaintiffs’ distribution
rights merely because the massive scale of copyright infringement over peer-to-
peer networks makes it difficult to determine what portion of plaintiffs’ loss was
caused by a particular defendant. Congress authorized an award of statutory
damages, in lieu of actual damages, for precisely those circumstances where the
injury to the copyright holder’s exclusive rights is difficult to determine. The
district court’s notion that because many people are violating plaintiffs’ rights, no
one can be held accountable, is manifestly incorrect.
Finally, the court compounded this error by erroneously equating the
exclusive right to distribute a sound recording with the exclusive right to perform
a musical work. Contrary to the district court’s reasoning, the harm to a copyright
holder from an unauthorized performance of a song in a bar or restaurant is vastly
-18-
different from the potential harm caused by using the internet to make a
copyrighted work freely available to thousands of potential customers. The
damage awards in performance rights cases thus do not afford an appropriate basis
for evaluating the jury award here.
The judgment should therefore be vacated and the case remanded for further
proceedings under the appropriate legal standards.
STANDARD OF REVIEW
The United States’ appeal presents questions of constitutional and statutory
law subject to this Court’s de novo review. Negron v. Caleb Brett U.S.A., Inc.,
212 F.3d 666, 668 (1st Cir. 2000); United States v. Fazal-Ur-Raheman-Fazal, 355
F.3d 40, 44 (1st Cir. 2004).
ARGUMENT
I. The District Court Should Not Have Reached The

Constitutionality of The Jury’s Statutory Damage Award
Without First Exercising Its Common Law Power Of
Remittitur.
The district court erred in refusing to exercise its common law power of
remittitur and reaching the constitutional issue of whether the verdict comports
with due process. “A fundamental and longstanding principle of judicial restraint
requires that courts avoid reaching constitutional questions in advance of the
-19-
necessity of deciding them.” Lyng v. Northwest Indian Cemetery Protective
Ass’n, 485 U.S. 439, 445 (1988). The Supreme Court has thus stressed that “[i]f
there is one doctrine more deeply rooted than any other in the process of
constitutional adjudication, it is that [courts] ought not to pass on questions of
constitutionality * * * unless such adjudication is unavoidable.” Spector Motor
Serv. v. McLaughlin, 323 U.S. 101, 105 (1944); Ashwander v. TVA, 297 U.S. 288,
347 (1936) (Brandeis, J., concurring).
The district court erred in failing to adhere to this bedrock principle of
judicial restraint. First, the trial court’s common law powers of remittitur afford
ample authority to constrain an excessive jury verdict, without involving the court
in needless constitutional adjudication. The Federal Rules of Civil Procedure
expressly vest district courts with the authority to grant new trials “for any of the
reasons for which new trials have heretofore been granted in actions at law in the
courts of the United States.” Fed. R. Civ. P. 59(a). “That authority is large,” and
includes the power to overturn verdicts for excessiveness. Gasperini, 518 U.S. at
433.
Second, common law remittitur standards for excessiveness are
commensurate with constitutional standards under the Due Process Clause and
afford defendants a full measure of protection from jury-awarded damages that are
-20-
grossly disproportionate to the pertinent injury. In particular, common law
remittitur under Rule 59 is based on the trial judge’s assessment of whether the
jury verdict is grossly disproportionate to the damages established by the evidence,
inordinate, shocking to the conscience of the court, or so high it would be a denial
of justice to permit it to stand. Segal, 746 F.2d at 80-81 (1st Cir. 1984). These
remittitur standards are fully consistent with the Due Process Clause, which
prohibits punitive damage awards that are “grossly excessive” in relation to the
pertinent governmental interests (Gore, 517 U.S. at 468) and “grossly out of
proportion” to the severity of the offense (id. at 576), and which bars awards of
statutory damages that are “wholly disproportioned to the offense and obviously
unreasonable.” Williams, 251 U.S. at 66-67.
Third, remittitur standards afford copyright infringers ample protection from
excessive awards of statutory damages under the Copyright Act, without
diminishing the copyright owners’ right to a statutory damages award that is
consistent with the purposes of the statute. As we will explain more fully below,
any inquiry into the excessiveness of a verdict must take into account the
underlying purposes of the statute authorizing a damage award. In the case of the
Copyright Act, that includes consideration of the compensatory and deterrent
purposes of a statutory damages award, the public harm caused by copyright
-21-
infringement, and Congress’s intent to permit an award of substantial damages
without proof of the precise degree of actual injury. All these considerations may
be taken into account in the course of reviewing a Rule 59 motion for remittitur.
Finally, dispensing with remittitur strips the Copyright Act of an inherent
protection against unconstitutionally excessive awards. Remittitur is firmly
established in the common law, having been recognized as early as 1822 in a
lower court decision by Justice Story and uniformly applied in the federal courts
since that time. Dimick v. Schiedt, 293 U.S. 474, 483 (1935), citing Blunt v. Little,
Fed. Cas. No. 1,578, 3 Mason 102 (1822); see also Honda Motor Co., Ltd. v.
Oberg, 512 U.S. 415, 421-26 (1994). Where, as here, a common-law rule is well
established, “the courts may take it as given that Congress has legislated with an
expectation that the principle will apply except when a statutory purpose to the
contrary is evident.” Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104,
108 (1991) (internal quotation omitted).
These considerations are fully applicable here. Congress amended the
statutory damages provisions of the Copyright Act in 1999, shortly after the
Supreme Court held in Feltner that the Seventh Amendment requires all such
awards to be determined by a jury. See Digital Theft Deterrence and Copyright
Damages Improvement Act of 1999, P. L. No. 106-160, § 2, 113 Stat. 1774 (1999)
-22-
But although the 1999 amendments substantially increased the range of
permissible damage awards, and although Congress must be presumed to have
known that such awards must, after Feltner, be determined by the jury, Congress
imposed no further limits on the jury’s discretion. Given that the trial judge’s
common law power to constrain excessive verdicts was firmly established when
these amendments were enacted, it must also be assumed that Congress expected
that the trial court would exercise its established remittitur power to keep jury
verdicts within reasonable – and constitutional -- bounds. Cf. Pacific Mut. Life
Ins. Co. v. Haslip, 499 U.S. 1, 20-22 (1991) (punitive damages award consistent
with due process where jury’s discretion constrained by post-verdict review
intended to ensure that they are reasonably related to purposes of award). By
nonetheless forgoing common law remittitur, the court circumvented the specific
standards and procedures for limiting jury discretion intended by Congress.
Capitol Records, Inc. v. Thomas-Rasset, 680 F. Supp. 2d 1045 (D. Minn.
2010) illustrates how the use of common law remittitur can correct excessive
awards of statutory damages without involving the court in unnecessary
constitutional adjudication. There, the jury returned a verdict finding that the
defendant – an individual who, like Tenenbaum, had used a peer-to-peer network
to download and distribute songs without commercial gain – had willfully
-23-
infringed 24 sound recordings. The jury awarded plaintiffs statutory damages of
$80,000 per song, for a total verdict of $1,920,000. The court, exercising its
common law review powers under Rule 59, remitted the damages award to $2,250
per infringed sound recording and directed the plaintiffs either to accept the
remittitur or face a new trial on damages. Id. at 1061. The court based its order on
many of the same considerations underlying the judge’s order here, thus taking
into account plaintiffs’ actual damages, the willfulness of defendant’s conduct,
and the need for adequate deterrence, all while seeking to ensure that the award
“does not veer into the realm of gross injustice.” Id. at 1049. It did so, however,
through the exercise of its established common law power, without engaging in
unnecessary constitutional adjudication.
The court here, in contrast, concluded that a constitutional issue as to the
excessiveness of the verdict would in fact inevitably remain if it relied on its
common law review powers. In reaching this conclusion, the court did not find
that the Due Process Clause imposed more rigorous standards of excessiveness
than ordinary common law review, and that review under the Due Process Clause
was therefore necessary to ensure that defendant received the full measure of
protection from excessive verdicts afforded by the Constitution. It reasoned
instead that: (1) under common law remittitur, it could only offer plaintiffs a
-24-
choice between a new trial and accepting a reduced judgment, (2) plaintiffs had
indicated they would not accept a reduced judgment, and (3) a new jury verdict
would likely be just as large and thus implicate the same constitutional questions.
Slip op. at 13-14.
In the court’s view, constitutional review solves this problem by
empowering the court to take the matter from the jury and to enter a reduced
judgment, thereby obviating the potential for an endless cycle of retrials and
excessive jury awards. This reasoning, however, is flawed in several important
respects, and it also raises a substantial question as to whether the trial court can
enter judgment for a reduced amount of statutory damages without violating the
Seventh Amendment right to a jury trial mandated by Feltner.
As an initial matter, the court erred in assuming that an order for a new trial
would inevitably result in another verdict so high as to implicate due process
concerns. The defendant, possessed of concrete knowledge of his potential
liability, and the plaintiffs, faced with the prospect of another expensive trial,
would have new incentives to settle. Moreover, the court’s assumption that a new
jury would inevitably return an award of a similar magnitude is entirely
speculative. Under the court’s own reasoning, the jury’s award was far in excess
of any that could be justified by the plaintiffs’ actual harm or the deterrent
-25-
purposes of the statute. If that is so, then there is no reason to expect that a
subsequent, properly instructed jury would choose an award of the same
magnitude. Indeed, if a new, properly instructed jury would, on the same
evidence, be highly likely to return a verdict of comparable magnitude, then the
court’s conclusion that the verdict is grossly disproportionate to defendant’s
offense is itself open to serious question.
Moreover, the court’s entry of a judgment for a reduced amount, without
giving the plaintiffs the alternative of a new trial, also raises additional
constitutional questions not implicated by common law remittitur. The Seventh
Amendment’s Reexamination Clause provides that “no fact tried by a jury, shall be
otherwise re-examined in any Court of the United States, than according to the
rules of the common law.” Accordingly, where a court concludes that a
compensatory damages award is excessive because it is unsupported by the
evidence, it may not fix the amount of the award itself but must instead either
obtain the plaintiff’s consent to a reduced award or order a new trial. Hetzel v.
Prince William County, 523 U.S. 208, 211 (1998).
There is a substantial question as to whether the Seventh Amendment
similarly bars a court from entering a reduced judgment if it determines that the
jury’s statutory damages award is unconstitutionally excessive. Several courts of
-26-
appeals, including this Court, have held that this principle does not limit a court’s
authority to enter a reduced amount of punitive damages if the jury’s award is
deemed excessive. Brisbal-Ramos v. City of Mayaguez, 467 F.3d 16, 26-27 (1st
Cir. 2006); Ross v. Kansas City Power & Light Co., 293 F3d 1041, 1050 (8th Cir.
2002); Johanson v. Combustion Eng., Inc., 170 F.3d 12320, 1331-32 (11th Cir.
1999); Cortez v. Trans Union, LLC, Nos. 08-2465, 08-2466, 2010 WL 3190882
(3d Cir. Aug. 13, 2010). Other courts, however, have questioned whether the trial
court can enter judgment reducing the jury’s punitive damage award without
running afoul of the Seventh Amendment. See Southern Union Co. v. Irvin, 563
F.3d 788, 790 (9th Cir. 2009) (noting that to avoid conflict with Seventh
Amendment, better course is to offer plaintiff the option of accepting remittitur or
or new trial); Continental Resources, Inc. v. OXY USA, Inc., 101 F.3d 634, 643
(10th Cir. 1996) (same); see also Lee v. Edwards, 101 F.3d 805, 813 (2d Cir. 1996)
(remanding constitutionally excessive punitive damage award for new trial unless
remittitur accepted).
In any event, cases holding that the Seventh Amendment permits a court to
enter judgment reducing a punitive damage award do not govern a court’s power
to enter judgment reducing the award of statutory damages under the Copyright
Act. “Unlike the measure of actual damages suffered, which presents a question
-27-
of historical or predictive fact, the level of punitive damages is not really a ‘fact’
‘tried’ by the jury.” Cooper Indus. Inc. v. Leatherman Tool Group, Inc., 532 U.S.
424, 437 (2001). In contrast, statutory damages under the Copyright Act have a
compensatory as well as deterrent elements and, under Feltner, they must be tried
by a jury if a jury trial is requested. See id. 523 U.S. at 1287-88.
At a minimum, there is a substantial question as to whether the court’s entry
of a reduced judgment is consistent with the Seventh Amendment. Though its
excessiveness holding is grounded on the Due Process Clause, the district court’s
decisional rationale is based on the conclusion that the jury’s award was far larger
than could be supported by any reasonable estimation of the plaintiffs’ injury or
the defendant’s gain. This is not simply a matter of reducing a jury award that
exceeds a statutorily-specified ceiling in order to ensure that the verdict conforms
to clearly established law. Rather, the court based its conclusion on an extensive
evidentiary and factual review. See slip op. at 42-50. In so doing, it engaged in
the kind of fact-finding that, under Feltner, is, as a matter of constitutional law, at
least arguably reserved for the jury.
This and the other constitutional issues presented by the district court’s
holding could all be avoided if review of the jury verdict is confined to that
permitted under Rule 59's procedures for common law remittitur. There would be
-28-
no occasion to address the legal standards governing review under the Due
Process Clause, no reason to determine whether the verdict comports with those
constitutional standards, and no Seventh Amendment issue as to whether the trial
court can, notwithstanding Feltner, enter judgment fixing statutory damages at an
amount well below that returned by the jury. The doctrine of constitutional
avoidance therefore requires the Court to vacate the judgment and to remand the
matter to the district court for consideration of whether the jury’s award is
excessive under common law standards for remittitur.4
4
A remand is necessary because the Seventh Amendment also imposes
limitations on an appellate court’s authority to conduct de novo review of whether
a jury verdict is excessive under common law standards for remittitur. In
Gasperini, the Supreme Court explained that the Seventh Amendment “bears not
only on the allocation of trial functions between judge and jury * * * ; it also
controls the allocation of authority to review verdicts.” Id., 518 U.S. at 432. The
Court therefore held that when reviewing a trial court’s denial of a motion to set
aside a jury verdict as excessive, the Seventh Amendment requires that appellate
review be limited to whether the trial court abused its discretion. Id. at 432-38;
see also Cooper Indus., Inc., 532 U.S. at 433 (if no constitutional issue is
presented, appellate court’s review of whether a jury’s award of punitive damages
is excessive is limited to whether trial court abused its discretion).
Gasperini does not address the precise circumstances presented here, where
the trial court has granted a motion to set aside the jury’s verdict as excessive, and
where the damages at issue serve both compensatory and deterrent purposes. Its
reasoning, however, strongly suggests that if, as Feltner holds, the Seventh
Amendment requires that the jury determine all aspects of statutory damages, then:
(1) the power to review the jury’s verdict for excessiveness resides in the trial
court in the first instance, and (2) the Seventh Amendment precludes an appellate
court from reviewing the jury verdict de novo. A remand for further consideration
-29-
II. Due Process Review of Statutory Damage Awards Under

The Copyright Act Must Proceed Under Williams, Not
Gore.
Even assuming the district court appropriately took up the constitutionality
of the statutory damages award, it erred in failing to apply the deferential due
process standards of review set forth in St. Louis, I. M. & S. Railway Co. v.
Williams, 251 U.S. 63 (1919). In Williams, the Supreme Court upheld against
constitutional attack a state penalty provision that permitted plaintiffs who were
overcharged by railroads to recover an award of $50 to $300. Each of the
plaintiffs successfully sued and won a penalty of $75. The Supreme Court agreed
that the Due Process Clause limits a legislature’s ability to impose penalties of this
sort, but stated that “enactments transcend the limitation only where the penalty
prescribed is so severe and oppressive as to be wholly disproportioned to the
offense and obviously unreasonable.” Id. at 66-67. The Court held that the state
penalty was permissible under this highly deferential standard, stressing that the
proportionality of the penalty must be measured, not by comparing it to the actual
private injury in the case, but rather to the “public wrong” the penalty was
intended to redress. Id. at 66.
The Gore “guideposts” do not displace Williams and have no direct
of common law remittitur is therefore necessary.

-30-
application to awards entered pursuant to statutes specifying the permissible range
of damages. Indeed, to the best of our knowledge, the decision below is the first
and only instance in which a court has applied Gore to due process review of a
statutory damages award.
Gore is inapposite for several reasons. First, the Gore guideposts are
tailored to review of a jury award of punitive damages under authority that
typically places few constraints on the jury’s discretion. Even before Gore, the
Supreme Court noted that the wide discretion typically accorded juries in the
award of punitive damages “pose[s] an acute danger of arbitrary deprivation of
property.” Honda Motor Co., Ltd, 512 U.S. at 432. The Gore guideposts are
accordingly addressed to the specific due process concerns arising out of vesting a
jury with virtually unbridled discretion.
Statutory damages under the Copyright Act differ in that they are entered
pursuant to a legislative determination expressly circumscribing the permissible
range of damages. The presence of legislatively-specified limitations on an
appropriate damage award is a crucial distinction. Such standards implicate the
reviewing court’s obligation to defer to the legislative judgment on an appropriate
assessment. Moreover, they limit the jury’s discretion by precluding awards
beyond a limit the legislature has deemed reasonable. As Justice Brennan
-31-
observed, “I should think that, if anything, our scrutiny of awards made without
the benefit of a legislature’s deliberation and guidance would be less indulgent
than our consideration of those that fall within statutory limits.” Browning-Ferris
Industries v. Kelco Disposal, Inc., 492 U.S. 257, 281 (1989)(Brennan, J.,
concurring). He thus concluded, “I for one would look longer and harder at an
award of punitive damages based on such skeletal guidance than I would at one
situated within a range of penalties as to which responsible officials had
deliberated and then agreed.” Ibid.
Second, the fair notice concerns animating Gore do not pertain to an award
of damages under statutes that specify in advance the permissible range of a
damage award. Gore reasons that, where a jury has unfettered discretion to award
punitive damages, the defendant, absent some limiting principle of proportionality,
does not have fair, constitutionally sufficient notice of the magnitude of the
sanction that may be imposed for misconduct. Gore, 517 U.S. at 574-75. The
Gore guideposts, by requiring that punitive damage awards be proportional to the
defendant’s misconduct, are intended to remedy this defect. They thus ensure that
defendants have adequate notice of possible sanctions. Where, however, Congress
has specified in advance the range of permissible damage awards, potential
defendants already have express notice of the magnitude of the possible sanction,
-32-
without need for a judicial gloss further constraining the jury’s discretion.
The district court questioned whether a defendant could have fair notice of
the potential sanction in light of the breadth of the range of permissible damages --
$750 to $30,000 in the absence of mitigating or aggravating intent. Slip op. at 22.
That the statute authorizes a very broad range of potential penalties, however, does
not render the notice afforded the defendant constitutionally insufficient. In
United States v. Batchelder, 442 U.S. 114 (1979), for example, the Supreme Court
addressed a similar question in the criminal context, determining whether two,
pre-sentencing guidelines statutes authorizing a broad range of fines and/or prison
terms were void for vagueness because they failed to provide adequate notice of
potential sanctions. One statute at issue provided for fines of not more than
$5,000 and/or prison sentences of not more than five years; the other statute
provided for fines of not more than $10,000 and/or imprisonment of not more than
two years for the same criminal conduct. Despite the wide of range of potential
fines and prison terms, the Court concluded that the notice was constitutionally
sufficient: “So long as the overlapping criminal provisions clearly define the
conduct prohibited and punishment authorized, the notice requirements of the Due
Process Clause are satisfied.” Id. at 123.
Batchelder dealt with adequate notice of a criminal sanction – potential
-33-
imprisonment – that poses significantly greater individual deprivations than the
civil damage awards at issue here. If notice of the outer bounds of a wide range of
potential criminal penalties affords a criminal defendant constitutionally sufficient
notice, then notice of the minimum and maximum award of civil damages
authorized by the Copyright Act must, a fortiori, be deemed constitutionally
sufficient as well.
Finally, Gore’s directive to consider the relation of the jury’s damages
award to civil or criminal penalties for the similar conduct (see id., 517 U.S. at
583-84) has no relevance to review of a damage award under a statute that already
reflects a legislative determination of appropriate sanctions. Gore establishes this
guidepost to aid the court in evaluating whether a jury’s discretionary award of
punitive damages is reasonably proportional to legislatively-imposed penalties for
similar misconduct. The guidepost is thus a check on the jury’s discretion,
deemed necessary to ensure that the jury’s otherwise unfettered power to fix
punitive damages does not result in awards that are grossly disproportionate to the
sanctions authorized by a responsible legislative body in comparable
circumstances.
In the case of statutory damages under the Copyright Act, however,
Congress has already imposed constraints on the jury’s discretion and specified
-34-
the range of permissible sanction. The Gore guidepost makes little sense in these
circumstances, for the jury’s damage award, if within the statutory limits, is itself
the assessment imposed by the legislature for comparable cases. Applying Gore
would mean comparing the statutory damage award to itself – a nonsensical result
that underscores the extent to which the Gore guideposts are ill-suited to review of
damages awarded under statutes that fix the minimum and maximum awards for
defendant’s misconduct.
Williams, in contrast, focuses on the fact that a legislative determination is
at issue. Unlike Gore, Williams directs the trial court’s attention to the underlying
purposes of a statutory damages regime. Rather than focus on whether a jury has
reasonably fitted the sanction to the defendant’s misconduct, Williams recognizes
that statutory assessments reflect the legislature’s judgment as to the amount
necessary to redress and deter public harms caused by the defendant. It thus
makes clear that the proportionality of the award to the plaintiff’s injury is not the
sole or even primary concern. It is rather the relation of the award to the gravity of
the public wrong resulting from defendant’s misconduct. Thus, where the award
“is imposed as a punishment for the violation of a public law, the legislature may
adjust its amount to the public wrong rather than the private injury, just as if it
were going to the state.” Williams, 251 U.S. at 66. And because the court in that
-35-
instance is dealing with the considered determination of a coordinate branch of
government, Williams further stresses that legislative judgments in this realm are
entitled to “wide latitude of discretion (id. at 66)” and may only be disturbed if
they are “so severe and oppressive as to be wholly disproportioned to the offense
and obviously unreasonable.” Id. at 67.
Not surprisingly, no other court has applied Gore to complaints that an
award of statutory damages under the Copyright Act violates the Due Process
Clause. In Zomba Enterprises, Inc. v. Panorama Records, Inc., 491 F.3d 574, 587
(6th Cir. 2007), cert. denied, 128 S. Ct. 2429 (2008), the Sixth Circuit, in the only
appellate decision to address the question under the Copyright Act, held that the
application of Gore is uncertain at best, and that due process review of a statutory
damages award may therefore proceed under Williams.
Similarly, in Lowrys Reports, Inc. v. Legg Mason, Inc., 302 F. Supp. 2d 455,
459-60 (D. Md. 2004), the district court held that Gore is inapplicable to statutory
damages under the Copyright Act. The court reasoned that “[t]he unregulated and
arbitrary use of judicial power that the Gore guideposts remedy is not implicated
in Congress’s carefully crafted and reasonably constrained statute.” Id. at 460. It
further noted that under the Copyright Act “[s]tatutory damages exist in part
because of the difficulties in proving – and providing compensation for – actual
-36-
harm,” and “they may only be awarded when a plaintiff forgoes the right to collect
actual damages * * * .” Id. at 460. The court therefore held that the damage
award was not subject to the Gore analysis. Ibid; but see Leiber v. Bertelsman
AG, No. 00-1369, 2005 WL 1287611 at *10-11 (N.D. Cal. June 1, 2005)
(suggesting in dicta that Gore applies to due process review of statutory damages
under the Copyright Act).
Authority under other statutory damage regimes similarly recognizes that
due process review must be tempered by the same principle underlying the
Williams standard: a damage award made under a statute that delimits the range of
permissible damages is based on a legislative determination of the appropriate
sanction and is therefore entitled to extraordinary deference when challenged on
due process grounds. Thus, in Romano v. U-Haul International, 233 F.3d 655,
673 (1st Cir. 2000), this Court reviewed whether an award of punitive damages
under Title VII of the Civil Rights Act was so excessive as to violate the Due
Process Clause. The Romano court did not expressly consider whether Williams
establishes the appropriate standards for reviewing whether an award of damages
subject to a statutory cap comports with due process. But it did note that Title VII
establishes a statutory limit on punitive damage awards (see 42 U.S.C. 1981a(b)(1)
& (3)) and concluded, consistent with the Williams standard, that “a statutory cap
-37-
provides strong evidence that a defendant’s due process rights have not been
violated.” Romano, 233 F.3d at 673.
Other appellate precedent stresses the same distinction. In Abner v. Kansas
City Southern R. Co., 513 F.3d 155 (5th Cir. 2008), for example, the Fifth Circuit
held, that “the combination of the statutory cap and high threshold of culpability
for any award confines the amount of the award to a level tolerated by due
process. Given that Congress has effectively set the tolerable proportion, the three-
factor Gore analysis is relevant only if the statutory cap itself offends due
process.” See also EEOC v. Fed. Express, 513 F.3d 360, 378 (4th Cir. 2008)
(applying Gore standards to review of statutorily capped, punitive damages under
the Americans with Disabilities Act, but noting that the cap affords defendants fair
notice of potential sanction).5
The weight of district court authority similarly holds that Williams, not
Gore, establishes the appropriate standard for determining whether a statutory
damage award comports with due process. See, e.g. Centerline Equip. Corp. v.
5
In Parker v. Time Warner Entertainment Co., 331 F.3d 13, 22 (2d Cir.
2003) the Second Circuit stated that “it may be” that an award of statutory
damages to a very large class under the Cable Communications Policy Act would
be subject to review under Gore. The court noted, however, that “[a]t this point in
this case, * * * these concerns remain hypothetical.” Ibid. The statement as to
Gore’s applicability to a statutory damage award is thus dictum.
-38-
Banner Pers. Serv., Inc., 545 F. Supp. 2d 768, 777–78 (N.D. Ill. 2008) (applying
the Williams standard to uphold the statutory damages provision of the Telephone
Consumer Protection Act); Accounting Outsourcing LLC v. Verizon Wireless
Personal Communications, LP, 329 F. Supp. 2d 789, 808–10 (M.D. La. 2004)
(same); Texas v. Am. Blastfax, Inc., 121 F. Supp. 2d 1085 ,1090–91 (W.D. Tex.
2000) (same); Verizon California Inc. v. Onlinenic, Inc., No. 08-2832, 2009 WL
2706393 (N.D. Ca. Aug. 25, 2009) (due process review of statutory damages
under Anti-Cybersquatting Consumer Protection Act governed by Williams). As
one district court concluded:
[I]t is highly doubtful whether Gore and Campbell apply to statutory

damage awards at all. Like the Sixth Circuit, this Court “know[s] of
no case invalidating * * * an award of statutory damages under Gore
or Campbell.” Zomba Enterprises, Inc. v. Panorama Records, Inc.,
491 F.3d 574, 587 (6th Cir. 2007). Under binding authority decided
before Gore, “only where the [statutory] penalty prescribed is so
severe and oppressive as to be wholly disproportioned to the offense
and obviously unreasonable” will it violate a defendant’s due process
rights.
Verizon California Inc, 2009 WL 2706393 at * 7, quoting Williams, 251 U.S. at
66-67.
In this case, the district court opined that Gore and Williams are not
meaningfully different. But whatever the semantic similarities between the two
-39-
standards, they serve fundamentally different purposes. Gore is designed to
impose constraints on a jury’s discretion in circumstances where the legislature
has not prescribed the specific circumstances warranting a damage award or the
range of permissible sanctions. Williams, in contrast, takes account of the
appropriate relationship between the reviewing court and the legislature. Unlike
Gore, it directs the trial court’s attention to the deference owed a legislative
judgment, the underlying purposes of a statutory damages regime, and the heavy
burden a movant must carry before the court can set aside an award falling within
the range specified by Congress. Cf. Zomba , 491 F.3d at 587 (review under
Williams “is extraordinarily deferential – even more so than in cases applying
abuse-of-discretion review”). Williams, not Gore, thus establishes the appropriate
standards for due process review of a statutory damage award.
III. The District Court Misconstrued The Scope And Purpose

Of Statutory Damages Under The Copyright Act.
The district court’s review of the jury’s damage award is further tainted by
several misconceptions about the interests protected by the Copyright Act and the
congressional purpose underlying a statutory damages award. Under either
common law remittitur or any of the potentially applicable due process standards
for determining whether a judgment is excessive, the jury’s verdict must be
-40-
measured against the purposes of a statutory damages award. As a practical
matter, there is no means of determining whether an award is “excessive” without
first ascertaining the harms Congress intended to redress, the statutory objectives
to be served by authorizing monetary damages, and the factors Congress intended
the fact-finder to consider in setting the amount of the award. Here, the district
court’s analysis is compromised by several fundamental misconceptions about the
scope of the Copyright Act and the interests served by a statutory damages award.
A. Congress Intended The Full Range of Statutory Damages

To Apply To The Unauthorized Copying and
Distribution Of Sound Recordings Over A Peer-to-Peer
Network.
The district court erred in concluding that Congress did not intend the full
range of statutory damages to apply to copyright infringements over a peer-to-peer
network. The court reasoned that because peer-to-peer file sharing was a newly
emerging technology when the permissible range of damages set forth section
504(c) was last amended in 1999, Congress could not have deliberately chosen to
include these infringers within the class of defendants subject to the full range of
statutory damage awards. Slip op. at 36. The court further reasoned that post-
enactment comments by sponsors of the 1999 amendments to the damages
provision indicate that Congress neither anticipated that the statutory damages
-41-
scheme would be applied to file sharers nor regarded the downloading of
copyrighted music over a peer-to-peer network as particularly reprehensible. Slip
op. at 34-36. The court therefore concluded that it “should not simply defer to
Congress’s statutory regime and assume that the jury’s award, because it is within
the statutorily authorized range, is sufficiently related to the government’s
legitimate interests in compensating copyright owners and deterring potential
infringers to pass constitutional muster.” Slip op. at 36.
This holding misconstrues Congress’s intent in several key respects and
fails to accord deference to Congress’s judgment as to the appropriate level of
statutory damages for copyright infringement. First, nothing in the text of the
statute suggests that Congress regarded copyright infringement by the users of a
peer-to-peer network as less serious or injurious than any other copyright
infringement. The statute protects the copyright owner’s exclusive right to
reproduce and distribute a sound recording, without regard to the means used to
effect an infringement. Whether Congress did or did not anticipate the ways in
which emerging technologies would facilitate various forms of copyright
infringement is entirely beside the point. The nature of the rights protected by
copyright remains the same, as does the nature of the legal injury flowing from an
infringement. There is no basis in the statute for concluding that Congress
-42-
regarded one means of copyright infringement as less blameworthy than another.
That several members of Congress expressed admiration for the ingenuity and
possibilities of peer-to-peer networking does not show that Congress – or that
even the particular legislators cited by the district court – regarded copyright
infringement over such networks as outside the reach of the statute, qualitatively
distinct from other acts of infringement, or otherwise exempt from the full range
of statutory damages authorized by section 504(c).
The widespread availability of peer-to-peer file sharing networks may make
infringing copyrighted sound recordings easy and ubiquitous. It does not make the
infringement any less illegal. Rather, as one member of Congress remarked in
hearings specifically exploring the impact of peer-to-peer networks on copyright
protection:
In the world of copyright law, taking someone’s intellectual property

is a serious offense, punishable by large fines. In the real world,
violations of copyright law over the Internet are so widespread and
easy to accomplish that may participants seem to consider it
equivalent to jaywalking – illegal but no big deal.
But it is a big deal. Under U.S. law, stealing intellectual property is
just that – stealing. It hurts artists, the music industry, the movie
industry, and others involved in creative work. And it is unfortunate
that the software being used – called “file sharing” as if it were
simply enabling friends to share recipes, is helping create a
generation of Americans who don’t see the harm.
-43-
Privacy and Piracy: The Paradox of Illegal File Sharing on Peer-to-Peer
Networks and the Impact of Technology on the Entertainment Industry: Hearing
Before the Permanent Subcomm. on Investigations of the Sen. Comm. on
Governmental Affairs, 108th Cong., 1st Sess. 10 (2003) (statement of Sen. Levin);
see also id. at 32-33 (“[I]t is imperative that Congress make clear its intent that the
existing laws apply with the same force to protect all art on the Internet as do other
aspects of the copyright laws to works of art found on more traditional forums”)
(statement of Sen. Pryor).
Second, section 504(c) does not distinguish among the methods or
technologies used to infringe a copyrighted work. Rather, the statutory damages
provision applies, without limitation, to all such infringements. Under the statute,
any adjustments in the minimum and maximum range of permissible damages turn
on the willfulness of the infringement, not on the means to carry it out. Even if
Congress had wholly failed to anticipate the extent to which new Internet
technologies would facilitate widespread copyright infringement, the reviewing
court is not free to engraft onto section 504(c) exceptions or limitations not fairly
discernible in the statutory text. It is well established that when the statutory
language is plain, the court must enforce it according to its terms. Jimenez v.
Quarterman, 129 S. Ct. 681, 685 (2009). That rule applies even if Congress has
-44-
not specifically envisioned the application of the statute to the circumstances at
issue:
[I]n the context of an unambiguous statutory text, that is irrelevant.

As we have said before, the fact that a statute can be “applied in
situations not expressly anticipated by Congress does not demonstrate
ambiguity. It demonstrates breadth.”
Pennsylvania Dept. of Corrections v. Yeskey, 524 U.S. 206, 212 (1998) (quoting
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 499 (1985).
Thus, as the Supreme Court observed with respect to the effect of a then-
new video recording technology on copyright liability, “[i]t may well be that
Congress will take a fresh look at this new technology, just as it so often has
examined other innovations in the past. But it is not our job to apply laws that
have not yet been written.” Sony Corp. v. Universal City Studios, 464 U.S. 417,
456 (1984). It is rather to “apply[] the copyright statute, as it now reads, to the
facts as they have been developed in this case * * *.” Ibid.
In any event, while Congress may not have specifically anticipated the
ramifications of peer-to-peer networking, the legislative history of the last
amendment of section 504(c) shows that Congress clearly understood that the
Internet would create vastly expanded risks of copyright infringement, and that it
fully intended the full range of statutory damages to apply to them. Specifically,
-45-
in 1999, Congress revised section 504(c) to significantly increase the permissible
range of statutory damages. See Digital Theft Deterrence and Copyright Damages
Improvement Act of 1999, P. L. No. 106-160, § 2, 113 Stat. 1774. The
amendments increased the minimum award for non-willful infringements from
$500 to $750, increased the maximum award for non-willful infringements from
$20,000 to $30,000, and increased the maximum award for willful infringements
from $100,000 to $150,000. Ibid. Congress explained that “[t]his substantial
increase reflects not only intervening inflation but also the determination that
increased global utilization and distribution of intellectual property and electronic
commerce warranted enhanced deterrence in order prevent copyright
infringement.” H.R. Rep. No. 106-216, 106th Cong., 1st Sess. 7 (1999).
There is no doubt Congress understood that the expansion of Internet use
contributed to this problem, and that it intended the enhanced damage limits to be
applied to Internet-based infringements. Even before the 1999 statutory
amendments, Congress noted that emerging technology had vastly increased the
Internet’s potential for facilitating infringement of protected sound recordings,
thus finding that “[t]he extension of an audio-compression technique, commonly
referred to as MP-3, now permits infringers to transmit large volumes of CD-
quality music over the Internet.” H.R. Rep. No. 105-339, 105th Cong., 1st. Sess.
-46-
4 (1997).
The legislative history of the 1999 amendment of section 504(c)
underscores Congress’s specific intent to deter and ensure adequate redress for
such Internet-based, copyright infringement. Congress found that:
By the turn of the century the Internet is projected to

have more than 200 million users, and the development
of new technology will create additional incentive for
copyright thieves to steal protected works. * * * Many
computer users are either ignorant that copyright laws
apply to Internet activity, or they simply believe that they
will not be caught or prosecuted for their conduct. Also,
many infringers do not consider the current copyright
infringement penalties a real threat and continue
infringing, even after a copyright owner puts them on
notice that their actions constitute infringement and they
should stop the activity or face legal sanction. In light of
this disturbing trend, it is manifest that Congress respond
appropriately with updated penalties to dissuade such
conduct.
H.R. Rep. No. 106-216, 106th Cong., 1st Sess. 3 (1999).
There is thus considerable evidence that Congress expected the full range of
statutory damages to be available against infringers who utilize the Internet to
copy or distribute protected works. Indeed, the notion that Congress would intend
some lesser sanction to be applied to Internet-based infringers is contrary to the
overall policies of the statute. Peer-to-peer networks increase the potential harm
-47-
to a copyright holder by vastly expanding the potential scale of unauthorized
copying and distribution. There is no basis for concluding that Congress
impliedly intended to except from the full reach of the statute a new class of
infringers capable of causing more harm to copyright holders than that caused by
infringers using other technologies.
Finally, contrary to the district court’s reasoning (see slip op. at 30, 34, 53),
the statute does not treat “noncommercial” infringers differently from those
seeking monetary gain. Rather, apart from several exceptions not relevant here,
Congress intended the full range of statutory damages to apply to commercial and
noncommercial infringers alike.6 Regardless of whether Tenenbaum’s
infringement was “for profit,” it was still quite harmful to copyright owners.
Infringement such as Tenenbaum’s can limit a copyright owner’s ability to
distribute legal copies of its sound recordings and can reduce the number of legal
sales.
The district court, in nonetheless concluding that Congress did not expect
statutory damages to apply to Internet-based, noncommercial infringers,
6
The statute directs the court to remit a damage award in certain
circumstances if the infringer is a nonprofit educator, librarian, archivist, or
nonprofit public broadcasting agency. See 17 U.S.C. 504(c)(2) (i) & (ii). None of
these exceptions applies to Tenenbaum.
-48-
misconstrued the plain language of the statute and failed to defer to Congress’s
judgment as to an appropriate damage award for copyright infringement.
B. The Court Improperly Discounted The Potential Harm

Caused By Defendant’s Distribution of Copyrighted
Works To Other Network Participants.
The court also erred in discounting the potential harm caused by
Tenenbaum’s distribution of copyrighted works to other peer-to-peer network
users. The court reasoned that “it seems likely that the individuals who
downloaded songs from Tenenbaum’s shared folder would simply have found
another free source had Tenenbaum never engaged in file-sharing. While file-
sharing may be very economically damaging to the plaintiffs in the aggregate,
Tenenbaum’s individual contribution to this total harm was likely minimal.” Slip
op. at 45. The court instead focused on the modest profits plaintiff might have
earned if Tenenbaum had lawfully purchased the 30 works from the ITunes Music
Store, thereby discounting the substantial potential harm caused by Tenenbaum’s
willful determination to make the works available to thousands of other
participants in the peer-to-peer network. Slip op. at 44-45.
A jury award might well be deemed excessive if it appears to hold the
defendant accountable for harm far beyond any that could be attributable to his
-49-
own infringement. But by the same token, the court cannot dismiss the potential
injury to the copyright owner merely because the harm caused by a particular
defendant cannot be readily disentangled from the harm caused by many others
who have infringed the work in the same way.
One of the core purposes of a “statutory” damages award is to afford the
copyright owner meaningful redress in circumstances where the actual injury
caused by the infringer cannot be proven. F. W. Woolworth Co. v. Contemporary
Arts, Inc., supra. As the Copyright Office explained in its 1961 report to
Congress, the need for statutory damages “arises from the acknowledged
inadequacy of actual damages in many cases,” in part because, “[t]he value of the
copyright is, by its nature, difficult to establish, and the loss caused by an
infringement is equally hard to determine. As a result, actual damages are often
conjectural, and may be impossible or prohibitively expensive to prove.” Report
of the Register of Copyrights, supra at 102.
Congress’s solution to this problem has been to permit an award of
“statutory damages” in lieu of actual damages, in whatever amount the trier of fact
deems “just,” and subject only to the qualification that the award remain within the
monetary limits set forth in the statute:
-50-
“In other words, the court’s conception of what is just in

the particular case, considering the nature of the
copyright, the circumstances of the infringement and the
like, is made the measure of the damages to be paid, but
with the express qualification that in every case the
assessment must be within the prescribed limitation, that
is to say, neither more than the maximum nor less than
the minimum.”
F. W. Woolworth Co., 3344 U.S. at 232, quoting L.A. Westermann Co. v. Dispatch
Printing Co., 249 U.S. 100, 106-07 (1919).
Congress’s reasons for permitting an award of statutory damages in lieu of
actual damages apply with particular force in the case of unauthorized file sharing
over a peer-to-peer network. It is exceedingly difficult to determine the harm
caused by the unauthorized distribution of protected works over a peer-to-peer
network. Given the decentralized nature of a peer-to-peer network, there is no
ready way to determine the number of times the defendant infringer has violated
the copyright holder’s distribution rights by uploading a protected sound recording
to other network participants. See Anderson v. Atlantic Recording Corp., 2008
WL 2316551 at * 9 (S.D. Tex. March 12, 2008) (“there is no way to ascertain the
precise amount of damages caused by Defendant’s actions in not only improperly
downloading Plaintiffs’ Copyrighted Recordings himself but also subsequently
distributing some or all of Plaintiffs’ Copyrighted Recordings to a vast community
-51-
of other persons on [the peer-to-peer network] KaZaA”); see also App. 93, 113-14
(testimony of Chris Connelly, noting that it was not technically feasible to
determine the extent to which defendant had uploaded copyrighted sound
recordings to other network participants). Nor is there a means of ascertaining the
extent to which a defendant infringer has contributed to subsequent, unauthorized
distributions by other network participants. Cf. Grokster, Ltd, 545 U.S. at 930
(under common law principles of secondary liability applicable to the Copyright
Act, defendant may be liable for intentionally inducing or encouraging direct
infringement by others), citing Sony Corp. v. Universal City Studios, 464 U.S.
417, 434 (1984). Moreover, even if it were possible to determine the number of
unauthorized copies distributed by a particular network participant, it is
exceedingly difficult to quantify the resulting economic harm to the copyright
holder. See, e.g., Rob and Waldfogel, Piracy on the High C’s: Music
Downloading, Sales Displacement, and Social Welfare in a Sample of College
Students, 49 Journal of Law and Economics 29 (April 2006).
Statutory damages are intended for precisely this circumstance, where the
potential harm to the copyright holder is considerable but the specific amount of
actual damage cannot be readily established. The district court, however, having
found that it could not separate the harm caused by Tenenbaum from the harm
-52-
caused by other infringers, chose to discount entirely the potential harm to
plaintiffs’ distribution rights. That is manifestly at odds with the fundamental
purpose of a statutory damages award.
Indeed, the district court’s rationale comes perilously close to asserting that,
because everyone is infringing the owner’s distribution rights, no one can be held
accountable for the resulting injury. Under the district court’s theory, everyone is
relieved from full statutory liability as long as no one is the sole source of an
infringing distribution. That cannot possibly be right. It would excuse a patent
violation of the copyright holder’s exclusive distribution rights and vitiate
Congress’s intent to ensure that statutory damages deter, not merely a particular
defendant, but others who might be tempted to commit similar acts of
infringement.
Finally, the court compounded this error by incorrectly equating the right to
control distribution of a sound recording with the right to perform the musical
work fixed in the sound recording. The court reasoned in this regard that the
jury’s award is far greater than the damages typically imposed on bars, restaurants,
and other businesses that play copyrighted songs in their establishments without
the appropriate license. Slip op. at 40-41. The court stated that it “cannot
conceive of any plausible rationale for the discrepancy between the level of
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damages imposed in public-performance cases and the damages awarded in this
case.” Slip op. at 42.
Performance rights in a song, however, are substantially different from
distribution rights in a sound recording and do not afford a meaningful basis for
evaluating the jury’s verdict. As an initial matter, apart from an exception not
relevant here, the owner of a copyright in a “sound recording” does not have
exclusive performance rights. The owner of the copyright in a musical
composition has the exclusive right to perform the work and is thus entitled to a
statutory licensing fee when recordings of the work are played over the radio or in
a bar or restaurant. In contrast, the owner of a copyright in a sound recording of
the composition does not have the exclusive right to “perform” the sound
recording and thus is not entitled to licensing fees when the recording is played for
the public. See 17 U.S.C. §§ 106(4), 106(6) & 114(a); see generally Arista
Records, LLC v. Launch Media, Inc., 578 F.3d 148 (2d Cir. 2009). The exclusive
rights in a copyrighted musical work thus differ in important respects from those
pertaining to a copyrighted sound recording, and the harms resulting from
infringement of the two, respective copyrights are not directly comparable.
More importantly, infringement of distribution rights on the scale permitted
by a peer-to-peer network is apt to have far greater impact on the owner’s ability
-54-
to exploit the value of his copyright than unlawfully playing a copyrighted song in
a restaurant or bar. The unauthorized performance of a song in a restaurant or bar
deprives the copyright owner of license fees for the relative handful of times the
recording is played. In contrast, the unauthorized distribution of a digitized sound
recording to thousands of Internet users deprives the owner of thousands of
potential sales – even assuming that only a small percentage of down-loaders
would buy the recording if it were not “free” over the Internet. Thus, damage
awards in the performance rights cases cited by the court do not afford an
appropriate basis for comparison to the injuries Tenenbaum’s infringements
caused the plaintiffs.
***
The district court has substantial authority to determine whether a jury’s
award of statutory damages is excessive. But under any of the potentially
applicable standards for excessiveness, the court must take adequate account of
the nature of the interests protected by the Copyright Act and Congress’s
fundamental purpose in authorizing an award of “statutory” damages in lieu of
actual damages. The district court’s holding does not satisfy these requirements
in several respects. It erroneously assumes that Congress did not intend the full
range of statutory damages to apply to infringements committed over a peer-to-
-55-
peer network. It improperly discounts the potential harm to plaintiffs’ exclusive
distribution rights. And it mistakenly compares the limited harms resulting from
infringement of the exclusive right to perform a musical composition to the far
greater potential harm resulting from infringement of the exclusive right to
distribute a sound recording.
The judgment must therefore be vacated and the matter remanded for further
proceedings. On remand, the court must exercise its reviewing function with full
recognition that Congress intended the entire range of statutory damages to apply
to Internet-based infringements, that Congress specifically authorized an award of
damages without proof of actual injury, that the awards are intended to deter future
infringements, that damages from infringement of a performance right are not
comparable to damages from an infringement of the distribution right, that the
statute authorizes greatly enhanced damages for willful infringements, and that the
statutory scheme gives the trier of fact broad discretion to determine, within the
general limits set forth in the statute, what amount of damages is “just.”
-56-
CONCLUSION
For the foregoing reasons, the judgment should be vacated and the case
remanded for consideration of common law remittitur. In the alternative, the
judgment should be vacated and the case remanded for constitutional review of the
jury verdict under Williams.
Respectfully submitted,
TONY WEST
Assistant Attorney General
CARMEN ORTIZ
United States Attorney
SCOTT R. McINTOSH
(202) 514-4052
/s/ JEFFREY CLAIR
(202) 514-4028
jeffrey.clair@usdoj.gov
Attorneys, Civil Division

Room 7243, Department of Justice
950 Pennsylvania Ave., N.W.
-57-
FRAP 32(a)(7) CERTIFICATE OF COMPLIANCE
I certify that this brief has been prepared using a 14-point, proportionally
spaced font and that, based on word processing software, this brief contains
12,747 words.
/s/ Jeffrey Clair

Room 7243, Civil Division
Department of Justice
950 Pennsylvania Ave., NW
(202) 514-4028
-58-
CERTIFICATE OF SERVICE
I certify that on October 29, 2010, I served the foregoing corrected Brief for
the United States as Plaintiff-Appellant/Cross-Appellee by electronically filing the
brief with the Court. As counsel for the defendant and private party, plaintiffs-
appellants are registered with the Court’s Electronic Case Filing System, the
electronic filing of this brief constitutes service upon them under the Court’s
Administrative Order Regarding Electronic Case Filing, (September 14, 2009).
The following counsel were served in this manner:
Counsel for Plaintiffs-Appellants:

Paul D. Clement
Jeffrey S. Bucholz
Erin E. Murphy
King & Spaulding, LLP
1700 Penn. Ave., NW
(202) 737-0500
pclement@kslaw.com
Timothy M. Reynolds
Eve G. Buron
Holme Roberts & Own
1700 Lincoln, Suite 4100
Denver, CO 80203
(303) 861-7000
-59-
Counsel for Defendant-Appellee:
Charles Nesson
1525 Massachusetts Ave., G501
Cambridge, MA 02138
(617) 495-4609
nesson@law.harvard.edu
/s/ Jeffrey Clair

Attorney for the United States
Room 7243, Civil Division
Department of Justice
950 Pennsylvania Ave., NW
(202) 514-4028
-60-

Tenenbaum - First Cir. Appeal - Brief of US

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Case: 10-1947 Document: 00116129389 Page: 1 Date Filed: 10/29/2010 Entry ID: 5499367

Nos. 10-1883, 10-1947 & 10-2052

IN THE UNITED STATES COURT OF APPEALS

SONY BMG MUSIC ENTERTAINMENT, a Delaware General Partnership;

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

BRIEF FOR THE UNITES STATES AS

STATEMENT OF THE ISSUES PRESENTED FOR REVIEW. . . . . . . . . . . . . . . 2

STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2. District Court Proceedings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3. District Court Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

I. The District Court Should Not Have Reached The

II. Due Process Review of Statutory Damage Awards Under

III. The District Court Misconstrued The Scope And Purpose

A. Congress Intended The Full Range of Statutory

B. The Court Improperly Discounted The Potential

FRAP 32(a)(7) CERTIFICATE OF COMPLIANCE

Accounting Outsourcing LLC v. Verizon Wireless Personal

Anderson v. Atlantic Recording Corp., 2008 WL. 2316551

Ashwander v. TVA, 297 U.S. 288 (1936). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Blunt v. Little, Fed. Cas. No. 1,578, 3 Mason 102 (1822). . . . . . . . . . . . . . . . . 22

Brady v. Daly, 175 U.S. 148 (1899).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Brisbal-Ramos v. City of Mayaguez, 467 F.3d 16 (1st Cir. 2006).. . . . . . . . . . . 27

Browning-Ferris Industries v. Kelco Disposal, Inc., 492 U.S. 257 (1989).. . . . 32

Capitol Records, Inc. v. Thomas-Rasset, 680 F. Supp. 2d 1045

Centerline Equip. Corp. v. Banner Personal Serv., Inc.,

Continental Resources, Inc. v. OXY USA, Inc., 101 F.3d 634

Cortez v. Trans Union, LLC, Nos. 08-2465, 08-2466,

Dimick v. Schiedt, 293 U.S. 474 (1935). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

EEOC v. Fed. Express, 513 F.3d 360 (4th Cir. 2008) . . . . . . . . . . . . . . . . . . 38

Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996).. . . . . . . . . . . . . 10

Hetzel v. Prince William County, 523 U.S. 208 (1998). . . . . . . . . . . . . . . . . . . . 26

Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415 (1994). . . . . . . . . . . . . . . . . . . . 22

Jimenez v. Quarterman, 129 S. Ct. 681 (2009).. . . . . . . . . . . . . . . . . . . . . . . . . . 45

Lee v. Edwards, 101 F.3d 805 (2d Cir. 1996).. . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Leiber v. Bertelsman AG, No. 00-1369, 2005 WL. 1287611

Lowrys Reports, Inc. v. Legg Mason, Inc., 302 F. Supp. 2d 455

Lyng v. Northwest Indian Cemetery Protective Ass’n, 485 U.S. 439

Metro-Goldwyn-Mayer Studies Inc. v. Grokster, Ltd, 545 U.S. 913 (2005). . 7, 52

Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991). . . . . . . . . . . . . . . . . . . . 23

Pennsylvania Department of Corrections v. Yeskey, 524 U.S. 206 (1998). . . . . 45

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985). . . . . . . . . . . . . . . . . . . . . . 45

Spector Motor Serv. v. McLaughlin, 323 U.S. 101 (1944). . . . . . . . . . . . . . . . . . 20

United States v. Batchelder, 442 U.S. 114 (1979). . . . . . . . . . . . . . . . . . . . . 33, 34

United States v. Fazal-Ur-Raheman-Fazal, 355 F.3d 40 (1st Cir. 2004). . . . . . 19

Vengas-Hernandez v. Sonolux Records, 370 F.3d 183 (1st Cir. 2004). . . . . . . . . 6

Verizon California Inc. v. Onlinenic, Inc., No. 08-2832, 2009

Zomba Enterprises, Inc. v. Panorama Records, Inc., 491 F.3d 574

Due Process Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim

Seventh Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 22, 26, 27, 28, 29

Digital Theft Deterrence and Copyright Damages Improvement Act of 1999,

1 Stat. 124-26 (1790).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

17 U.S.C. 101, et seq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Fed. R. Civ. P. 59(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 20, 22, 29

H.R. Rep. No. 105-339, 105th Cong., 1st (1997). . . . . . . . . . . . . . . . . . . . . . 46-47

Privacy and Piracy: The Paradox of Illegal File Sharing on Peer-to-Peer

Report of the Register of Copyrights on the General Revision of the U.S.

11 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure

4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright pp. 14-68. . . . . 7

IN THE UNITED STATES COURT OF APPEALS

Nos. 10-1883, 10-1947 & 10-2052

SONY BMG MUSIC ENTERTAINMENT, a Delaware General Partnership;

ON APPEAL FROM THE UNITED STATES DISTRICT COURT